New Age can of worms

An egg dance of note by all concerned

Issues arising from the affairs of The New Age (TNA) newspaper and the wealthy Gupta family over the past two weeks have caused an egg dance of note among a wide range of prominent and disparate South African political, business and media role-players. From the presidency to opposition leader Helen Zille and her Democratic Alliance, senior members of the ANC, state-owned companies and others – all have been dragged onto the dance floor.

The main issue has been the hosting of expensive breakfast events by TNA. The events, mostly sponsored by state-owned enterprises to the tune of tens of millions of rands, created a platform for important political leaders – from President Jacob Zuma to Ms Zille – to interact with mainly top businesspeople. Sponsors included Telkom, Eskom and Transnet, while the SABC televised these breakfasts free of charge.

The second issue concerns the advertising spend of government departments – particularly the presidency – in TNA, owned by the same Gupta family.

The third issue that has added to the politically toxic mix, concerns the question of donations to political parties. Unlike countries such as the United States and Britain, the funding of political parties in South Africa is not subject to legislation or regulation, thus allowing complete secrecy. A bid by the Independent Democrats in Parliament in 2011 to have such legislation introduced, was blocked by the other parties.

The debacle of the last two weeks certainly established a strong need for this, and related issues, to be revisited.

The DA and other newspapers seemed particularly irked by the close ties between the Gupta and Zuma families and the fact that TNA was getting a huge chunk of the government’s advertising budgets without being subjected to the Audit Bureau of Circulation (ABC) audits like other newspapers. These audits determine the circulation figures which, in turn, heavily influence advertising rates.

This prompted Zille and others to draw comparisons with the infamous 1978 Infogate scandal. Among others, the then National Party (NP) government secretly funded The Citizen newspaper. The affair brought down a prime minister and several other senior members of the ruling establishment of the time.

In both instances, then and now, public funds and newspapers were used to spread the message of a particular political party and its government. But that is where the similarity ends: The NP government’s 1970s information campaign was illegal, while no evidence has been produced to date that the ANC government’s current campaign is not within the law.

But a number of moral issues have arisen which could, if addressed, have a bearing on future legal aspects. In the spotlight is the rather murky area where politics and the media intersect, the spending of public funds, the funding of political parties, and the role of foreigners and their money in domestic politics in pursuit of business interests.

Greater transparency

Firstly, there is a need for greater transparency and better regulation of public spending by government and its agencies. This was recently aptly demonstrated by the multimillion-rand upgrades at President Zuma’s private Nkandla residence, followed by the cynical whitewash attempt by the minister of public works, Thulas Nxesi.

Entities such as Eskom and Transnet are state-owned, and government is the majority shareholder in Telkom. These entities have massive monopolies, and questions arise about the need for millions to be spent on brand promotion at breakfasts that were clearly little more than a lucrative business deal for the Guptas and a good public relations exercise for the ANC.

The Guptas are known to be benefactors of the ANC and the Zuma family.

Glass houses

But neither should people living in glass houses throw stones. While competitor newspapers, the DA and Zille let fly with attacks on TNA, the ANC, President Zuma and the Guptas, it should be remembered that in the past some other newspapers had also approached these state-owned entities for similar sponsorships.

Such fund-raising breakfasts or dinners are common practice among most political parties everywhere.

But worst of all, two weeks ago, Zille pulled out of a TNA breakfast because of public funds being used to sponsor it.

Her denial of knowledge of the sponsorships and of the controversial nature of the events, however, rings hollow in light of news reports on the subject even before last year’s events in which she participated.

On 4 November 2011, Mail & Guardian (M&G) reported: “In what appears to be a clear case of a conflict of interest, Telkom is sponsoring presidential breakfast briefings hosted by The New Age newspaper, in which Telkom chairperson Lazarus Zim holds shares and is a director.”

Even the extent of the Telkom sponsorship deal was already known at the time, and M&G reported that its sources “... said Telkom sponsored The New Age business briefings to the tune of R4 million.”

In January this year, Zille said she was pulling out of a planned appearance at a TNA business breakfast after learning about how it was funded, claiming she was under the assumption that the events were funded by the newspaper and ticket sales.

It has since transpired, however, that in February 2012, three months after the M&G report, Zille not only participated in a TNA briefing event, but also thanked Telkom for its sponsorship.

To make matters worse, Zille engaged in a flurry of contradictory statements about whether or not her party had received a R300 000 donation from the Guptas and/or one of their companies. She attributed the donation to a senior executive in a Gupta company, claiming he had made this in his personal capacity – only to be contradicted by the man who had signed the cheque.

Presidency glosses over truth

In the meantime, the presidency – in an attempt to explain the extent of advertising spend in TNA – has largely glossed over the truth in a statement on the matter. Releasing a breakdown of its spend among South African newspapers, there has been an attempt to put spin on the figures.

The presidency has told the public that last year, Naspers received 35% or R19 million of the presidency’s budget; Avusa received 28% or R15.6-million; Independent Newspapers received 14% or R8 million; and 15.9% or R8.8-million went to TNA.

What has not been said, however, is that TNA is but one newspaper, while the other media groups each owns several newspapers. If the figures for individual newspapers were to be given, a dramatically different picture would likely emerge. If only the three main daily newspapers of Naspers are taken into consideration, the average spend per paper drops to more than R2 million less than on TNA.

The presidency says it based its decision to advertise in TNA on the paper printing between 100 000 and 120 000 copies per issues. What it does not say is that, in the absence of circulation audits, as with The Citizen many years ago, most or all of the 100 000 copies could have ended up on a rubbish dump – resulting in a complete waste of taxpayers’ money.

According to reports, TNA has received up to 77% of its advertising income from government to the tune of R64 million since 2010.